The reason is you get higher rent, better tenants, and a greater appreciation on location. Are you open to exploring areas outside of Santa Clara County? In Santa Clara County $200,000 is going to limited you to condos. You will want to review the monthly HOA fees which affect your ROI. Also, more and more condo communities are restricting renting the condo's out. So reviewing the HOA documents, minutes and newsletters are very important.
Rental are in high demand so your thinking of purchasing for a rental is a good one. There are so many questions I would be asking my investor before going forward and hopefully the Broker/Agent your select will ask you those questions so that you can make an informed decision.
Have an amazing day!
Wish you all the best and success in your investing,
The number of units matter because it helps you get more income for your investment and helps cover the bills when people don't pay rent.
Location of the property matters because neighborhoods that are nicer, safer and have better schools have a greater possibility of higher rents than a property in a less desirable area. These rentals also cost more to purchase.
The decision you're about to make takes more consideration than a few emails. You're biggest issue to address will be making sure the property has a positive cash flow.
If you'd like to schedule an appointment to talk about the possibilities, please give me a call.
Please clarify your question.
It's not clear whether you are looking to buy a $200,000 property for cash, or put a $200,000 down payment on a more expensive property.
$200,000 cash would only buy one small cheap condo.
$200,000 down payment could buy one nice $1million house in a nice district, or 4 Condo's in other locations in the San Jose area, anything in between these 2 extreems i.e. 2 good Duplexes.
There are not so many houses posted on the current market with 200K in bay area as my updated experience working with my clients now if your purchase amount is 200K.
Assume that your down payment is about 200K, I will suggest you get a property for the price range between 300-500K investment property since you need to concern about cap rate.
Moreover, locations or areas will be a big concern for renting and choosing a good tenant.
Debra Tsai Realty â€“ Meeting Your Real Estate Needs
Debra Tsai, Broker
Short Sale Specialist
Certified Broker Price Opinion Resource
If you're looking at return returns on a cash deal, you can expect to get about 8% net cash returns after all expenses with 10-20% appreciation. With prices going up this year, it's no longer easy to get net 9-10% cash returns in San Jose.
I'm not quite sure, are you purchasing with all cash or are you getting a loan with 200k down.
In either case you would look for rental returns. This goes hand in hand with location. If it is a 200k purchase I would look for a good condo in the best are I can afford.
If you have any questions or need help please feel free to contact me.
At your service,
Certified Distressed Property Expert
It's OK to buy a Townhouse/Condo within $200,000 and rent it out. However, I would think the best could be buying a Duplex/4-flex. If you have income to support the new loan, then use $200,000 for initial investment/down-payment.
You can visit my website and read market review for these types of properties in San Jose.